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Homeowners’ insurance is one of the most common types of insurance and is unfortunately the most least understood. A lot of homeowners in Florida believe that their policy covers them for any damage sustained to their home or its contents. In reality, homeowners’ policies contain many exclusions and restrictions on coverage that can leave you with a coverage gap. Below are the five most common myths about homeowners’ insurance:
1. Loss-of-Use Coverage:
If your house has suffered from severe damage that it is not feasible for you to live in while it’s being repaired, you will most likely expect that the insurance company will compensate you by placing you in a hotel while work is being done in your house. However, this is not necessarily true. Not all policies include this facility. If you have to pay for the expense of your hotel, it will quickly start to add up, making you prone to a financial risk. If loss-of-use is covered, it will be stated clearly in your policy along with any limits of coverage. For example, your policy might state a maximum amount or, it might condense the amount of time the expenses will be paid for, as that will only be fair to the insurance company.
2. Replacement Cost:
Replacement cost in a homeowner’s policy refers to valuing the loss at the amount it will cost to replace the item. For example, if your 3-year-old laptop is lost in a fire, replacement cost coverage would allow you to purchase a new one with identical features. This is a myth in which homeowners believe that it would be settled by the insurance company, however, the bulk of policies do not carry this clause. If coverage is not included, losses will be valued at what they were worth in their condition before the calamity. Replacement cost clauses are a valuable inclusion in a homeowners’ policy.
3. Flood Coverage:
Almost all homeowners’ insurance policies exclude flood coverage, along with earthquakes and other natural disasters. Floods can occur for a number of reasons, such as hurricanes, burst pipes or, even sewer backup. Usually, a flood is one of the most common causes of home damage and the destruction of your goods. There are companies in Florida who specifically cater to flood insurance. If you live in a flood prone area in Florida, you should look into getting a separate flood policy.
4. Termites:
Termites are present in southern climates where their lifecycle is not impacted by the cold weather. Termites eat wood and can eat the support of your house and affect its durability. They live in large colonies and can collectively destroy the structure of your home. Repairing termite damage and wiping them out can cost thousands of dollars. Most policies exclude termites and other kinds of pest damage. If you live in an impressionable area, the best insurance is to have your house regularly inspected and to have it sprayed by a professional.
5. Valuation of Loss:
Normally, when you have a home insurance claim in Florida, the insurance company will send out an inspector to determine the extent of the damage and the most efficient way to fix it. The inspector will then assess a value to the loss which will be the minimum that the insurance company will pay in order to meet their contractual obligations. However, if you believe that your loss should be valued higher and can prove that, you can negotiate the settlement with the company. This can be done by keeping receipts and pictures of valuable items which will help your backup your claim.
These above are the most common myths regarding homeowners insurance that people generally have in Florida.